Linksys expected to fetch less than the $500 million Cisco paid in 2003

Cisco Systems is one the largest makers computer network hardware in the world. While the majority of the products that Cisco sells directly are enterprise grade products sold to businesses, Cisco does have the Linksys consumer brand for wireless routers, hubs, and IP cameras.

However, a report suggests Cisco is looking to sell Linksys and has hired Barclays PLC to help it find a buyer. Bloomberg indicates that Linksys could be interesting to TV makers seeking a recognized brand name and technology.

Cisco purchased Linksys in 2003 to give itself a consumer networking arm for $500 million. At the time, Linksys was a mature company in the consumer business segment with low margins. Linksys is now expected to fetch significantly less than the $500 million Cisco paid.

Like many other companies in the technology segment, Cisco has been downsizing in order to streamline its operations. The company eliminated 7,800 employees over the last year and closed its Flip video camera unit that made small, handheld digital camcorders.

No kidding. I was thinking that Cisco would improve functionality and keep the manufacturing quality. Instead they screwed up the software side and drove the manufacturing quality through the floor. I had a couple pre-Cisco Linksys products (a router that lasted me 2 years and a 100Mb NIC that is still in use today) with very good luck.

I got one Linksys/Cisco router for my dad, and that stupid thing took forever to configure because of how confusing it was (a Cisco hallmark trait) and it only lasted about 2 months. We didn't bother with getting a new one under warranty because it was just too much of a PITA. I swore I wouldn't buy another one.

I think my modem is DOCSIS 2.0 and my 54G is probably v2. While not pre-Cisco era, they are still tiptop. Both have been powered on and serving packets for 99% of their lives. Plus, they stack on top of each other. I couldn't ask for anything more. lol

I think it'll take either full IPV6 or +100Mb broadband to get me to power these guys down.

I think everyone is on the same page here. I never understood why Cisco ever bought Linksys. Were they planning on using Linksys consumer technology in their business products? Of course not. Were they planning on putting their enterprise hardware/firmware into consumer products? Of course not. Cisco is already the big name in business networking, so it's not like they needed a mass-market consumer product to slap their logo on and get their name out there.

Like many of the big IT mergers of the past decade, it had failure written on it from the beginning. Corporate mis-management at its finest.

quote: Were they planning on putting their enterprise hardware/firmware into consumer products? Of course not.

Several of their products were actually gimped down versions of hardware found in their business/enterprise units. Same chips and PCB under the hood, only the firmware locked away a lot of the performance and or features.

Before they really cheesed up the Linksys product lines, I used to make it a habit of looking at DD-Wrt & Tomatoe for the gimped down routers and switches that could be "unlocked".

You could put the open source firmware on it and it would unlock most if not all of the locked down features. it might not have all the ports of the business class units but it didn't make a difference to the performance and capabilities.

Funny thing about the Cisco software EULA: they don't allow anyone to publish performance measurements of their products. There's a reason for that, but my company could be in big trouble if I mention why. Cisco has too many lawyers and not enough good engineers.

perfect opp for an employee buyout. get some cable co to make me their in-house wireless router (riding the cisco name since they do set-top boxes) -- brighthouse/time-warner stock them on-the-shelf! so it, along with retail mkt, would be a nice consistent biz without some corporate yahoo to screw it up!

Back when it first happened I saw it as a ploy to keep consumer-grade routers from ever being "good enough" for offices and such. Seeing the difference with and without custom firmware, I think it's "case closed." The stock firmware simply must be deliberately unreliable.

I remember when my Linksys 802.11b router had an issue that made it incompatible with XBOX Live. I was also first in line for the WRT54G "draft-G" router from Linksys. Rebooting at least once a week was entirely normal.

"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer